House prices continued their roller coaster route last month with a 0.2% fall following a 0.5% rise in March, according to figures released by the Nationwide Building Society.

However the fall in the index is not the good news it might seem for first-time buyers. According to the building society, the small drop is the result of "seasonal adjustment", a twiddling of the figures to make up for the fact that more properties sell in April compared to, say, December, therefore distorting prices.

In reality, house prices actually rose in April to £165,609 from £164,751 in March, and the three-month on three-month measure showed a "modest" rise of 0.6%. This measure is also seasonally adjusted.

The monthly index fall left average house prices 1.3% lower than the same period in 2010, when the average house price was £167,802.

Robert Gardner, Nationwide's chief economist, said: "Since November 2010 house prices have increased in three months and fallen in three months. However, it is not unusual to see a pattern of modest monthly increases and decreases when the market is fairly static, as has been the case since last summer."

He said that while household budgets remained under pressure, unemployment had improved, albeit a tiny fall of 0.1% to 7.8% in the three months to February.

"Together with continued low interest rates, a gradual improvement in the labour market should help to provide support for housing demand, while limiting the number of forced sales," said Gardner. "Nevertheless, a strong rebound in the market remains unlikely as the recovery is still expected to remain modest by historic standards. In our view, the most likely outcome is that house prices will continue to move sideways or drift modestly lower through 2011."

Howard Archer from IHS Global Insight said: "The renewed fall in house prices in April is consistent with our view that house prices will trend down gradually overall through the rest of 2011 and, very possibly, the early months of 2012 as tighter fiscal policy and the likelihood of gradually rising interest rates before the end of 2011 pressurize the housing market.

"On top of that high unemployment, negative real income growth, elevated debt levels and still significant difficulties in getting a mortgage (particularly for first-time buyers) do not bode well for house prices. Furthermore very low and currently falling consumer confidence will make many people reluctant to risk buying a house.

"Meanwhile, although there are signs that housing market activity has edged off its lows recently, it is still at a very weak level that historically has been associated with falling house prices.

"Some support to house prices could come if the number of houses coming on to the market is limited over the coming months. The modest support provided to first-time buyers in the budget is too small to provide major support to the housing market.

"On balance, we believe that house prices are likely to fall by around 7% overall from current levels by mid-2012 and end up declining by some 10% overall from their peak levels in 2010."